Fair Trade Commission to extend complaint rights to public, local governments; chaebol heads face up to 10% surcharge for omitting affiliates

The Korea Fair Trade Commission is pushing to overhaul its exclusive complaint referral system, with plans to grant direct complaint rights to citizens meeting a minimum threshold, central government agencies and metropolitan local governments.

The commission also plans to impose personal surcharges on the heads of large business groups that omit affiliates from required disclosures, conduct intensive inspections of unfair subcontracting in key national industries such as shipbuilding, plant construction and power generation, and carry out a comprehensive audit of regulatory reform tasks undertaken over the past decade to identify further improvements.

FTC Chairman Ju Byeong-gi presented the commission's second-half 2026 work plan at Cheong Wa Dae's Yeongbingwan on Tuesday.

Under the plan, the FTC will pursue reforms across five areas in the second half of this year, under the overarching goal of "restructuring monopolistic market conditions and building a foundation for fair growth." The five areas are: establishing a fair-trade order in everyday life, reducing power imbalances among economic actors, fostering an innovative digital market ecosystem, curbing economic concentration by large business groups, and improving the fair-trade enforcement framework.

As part of the enforcement framework overhaul, the FTC will reform the exclusive complaint referral system by granting direct complaint rights to citizens above a set threshold, central government agencies and metropolitan local governments.

To ensure responsible use of those rights, the commission will put safeguards in place — including the establishment of a "complaint review committee" (tentative name) within each government body. The minimum number of citizens required to exercise a direct complaint right will be finalized through sufficient public deliberation during the subordinate legislation amendment process.

Metropolitan local governments will also be granted investigation and disposition powers over certain violations of the three laws governing subcontracting, franchising and dealerships — collectively known as the "Gapul Three Laws" — as well as the Act on Fair Labeling and Advertising. Investigation authority will cover acts whose legality can be confirmed on the spot, such as failure to issue a written contract, and local governments will be empowered to impose fines and issue corrective recommendations for violations.

Safeguards to prevent duplicate or erroneous enforcement will also be established, including requirements to notify the FTC before launching an investigation, report investigation results and grant the FTC authority to demand corrective action.

In the area of everyday consumer protection, the FTC will focus on cartels that exploit international instability and supply chain disruptions, as well as unfair practices in sectors closely tied to daily life.

The commission will investigate and remedy collusion in chemical products, paint and petroleum products, as well as rebates in food supply to welfare facilities. For repeat offenders, it plans to introduce a system allowing license revocation and business suspension, extend the statute of limitations for cartel sanctions to a maximum of 15 years, and revise the leniency program for voluntary disclosures.

The FTC will also pursue regulatory improvements in sectors where competition is structurally limited, such as agricultural distribution and the defense industry, and will conduct a full review of regulatory reform tasks carried out over the past decade to identify additional improvements. The commission will also examine prepaid funeral companies' asset management practices, their obligation to notify customers of advance payments, and compliance with the mandatory reserve ratio of 50 percent for advance payments.

The FTC will also move to strengthen the bargaining power of economically weaker parties. It plans to codify the right of subcontractors and dealership owners to form collective organizations and will push to amend the Subcontracting Act and the Dealership Act to make collective bargaining more effective. The commission will conduct intensive inspections of unfair subcontracting in key national industries — shipbuilding, plant construction and power generation — and strictly sanction the shifting of industrial accident safety management costs and responsibilities onto smaller contractors.

Protections for small and medium-sized enterprises and small business owners will also be strengthened. Franchise headquarters will be required to obtain franchisee consent and notify them of results when running advertising or promotional campaigns. To ease the operational burden on gas stations caused by surging international oil prices, the commission will revise the standard dealership contract for the petroleum distribution sector to allow mixed sales and abolish the post-settlement system.

In digital markets, the FTC will pursue institutional reforms to promote competition and lay the groundwork for innovation. It will specify types of illegal conduct — such as abuse of monopoly power through data — and update subordinate regulations under the Fair Trade Act to reflect changes in the economic environment.

The commission will investigate and correct misleading advertising, including ads that present unimplemented AI features on smartphones as forthcoming or conceal the fact that device performance is throttled under certain conditions. The FTC said it is currently investigating whether Apple's delayed rollout of "more personalized Siri" and "Apple Intelligence" constitutes a violation of the Act on Fair Labeling and Advertising.

To swiftly block AI-generated false advertising on social media, the FTC will expand its information-sharing cooperation framework — currently limited to Google — to include Naver and Meta. The number of platforms subject to AI-assisted monitoring for hazardous products will also grow from eight to 11, with Bungaejangter, Karrot and Junggo Nara added to the list.

Oversight of large business groups will be tightened as well. The FTC plans to introduce a system under which the head of a business group who omits affiliates from required disclosures faces a personal surcharge of up to 10 percent of whichever is greater — the total assets or the average annual revenue of the omitted affiliates. The commission will also raise its referral standards for prosecuting serious or repeat omissions.

The FTC also plans to amend the law so that self-dealing regulations apply during any period in which a business group was not designated as a disclosure-subject group due to the omission of affiliates.

The commission will additionally reform the disclosure system to strengthen market self-monitoring. To promote environmental, social and governance management, it will add new disclosure items — including the number of separately elected audit committee members, the outcomes of minority shareholder rights exercises, and whether companies have adopted a fair-trade compliance program and how it is being operated.

Penalty surcharges for repeat disclosure violations will also be tightened: the current standard of "10 percent for four or more violations within five years, 20 percent for seven or more" will be raised to "10 percent for two or more violations, 50 percent for four or more." To encourage large business groups to voluntarily improve their ownership and governance structures, the FTC will develop benchmark standards for desirable ownership, governance and conduct, along with quantitative evaluation indicators to measure compliance.